Committee seeks autonomy for parastatals
The Budget and Finance Committee of Parliament has called for the independence of statutory corporations and recovery of arrears owed by the central government.
During their appearance before the committee last week, Northern Region Water Board (NRWB) and Agricultural Development and Marketing Corporation (Admarc) admitted that the debt levels they have are crippling their operations.
For instance, NRWB told the committee that they are owed K2 billion by government institutions and it is on record that Admarc, the State produce trader, had debts amounting to K45 billion which government bailed them out, but still has K23 billion debts in 2016/17 financial year for maize purchases.
The maize at Admarc was purchased for sale at the government recommended price which prevented the institution from recovering the costs.
Reacting to the presentations, committee chairperson Rhino Chiphiko said parastatals could only make profits and remit dividends to the government if they were not under its control.
In an interview after the committee’s interface meetings with several parastatals that included NRWB and Admarc, Chiphiko noted that most parastatals are performing below expectation because government owes them billions, a development that is crippling their operations.
He blamed the governance set up of the organisations which gives the central government over 90 percent majority shareholding.
Said Chiphiko: “The major problem is that the ownership structure of these statutory corporations makes the major shareholder who is government to do whatever they want and at the end of the day the water boards and other statutory corporations don’t have the powers to go back and say give us back our money.”
He said it was a concern to the committee that the institutions are reeling in debts instead of making and paying dividends.
In an interview, NRWB chief executive officer (CEO) Titus Mtegha confirmed that the board is owed money by government departments and the issue has been brought to the attention of the Ministry of Finance for intervention.
Speaking when she appeared before the committee last week acting Admarc CEO Margaret Roka Mauwa said the parastatal is choking in debts due to high interest rates as it borrows for social operations on behalf of government.
